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Diamond ‘welcomes’ ICB report on UK banking reform

The Independent Commission on Banking’s report on reform of the UK banking sector represents “a welcome step” towards “the greater clarity” that lenders require in order to “be able to operate with confidence”, Barclays chief executive Bob Diamond said.

Addressing the Barclays Capital conference in New York, Diamond noted that the release of the ICB’s report had “lifted” the “cloud” of uncertainty surrounding new regulations for the industry. He also complimented the panel, chaired by Sir John Vickers, for deciding to make the core “ringfencing” recommendation flexible.

While reiterating Barclays’ opposition to the “ringfencing” proposal, Diamond said that the bank could “make it work”. He also suggested that the lender is keen on retaining its headquarters in the UK.

Meanwhile, HSBC chairman Douglas Flint, reacting to the Vickers report, quipped that the document had “not gone as far as we thought they might”.

Also speaking at the BarCap event, Niall Booker, chief executive of HSBC North America, lent his backing to the ICB’s recommendation of forcing UK banks to hold more loss-absorbing “bail-in” bonds, but cautioned that investors could potentially discriminate between purchasing the debt of ring-fenced banks and non-ring-fenced banks.

Richard Meddings, finance director of Standard Chartered, echoed Booker’s sentiments, saying he was concerned over the likelihood of "turbulence" in funding markets as a consequence of the ICB proposal.

Separately, Schroders chairman Michael Miles, addressing a conference organised by Hong Kong's trade development council in London, said on Tuesday that HSBC “must be sorely tempted” to consider moving its headquarters from London to the former UK colony in the aftermath of the release of the ICB report.